In our opinion, this withholding of payment of the deposit amount to the complainants even after the date of maturity is clearly deficiency in service: SCDRC – Karnataka

Sumangal Rao & another v. Vijaya Bank, CPR (1) 163 (SCDRC – Karnataka)

1995 1 CPR 163

Here, the complainants sought for payment of deposits bearing Nos. VCC 308/91 and VCC. 309/91 dated 31.10.1991 with interest and also compensation in a sum of Rs.2,50,000/ – from the Opp. party (Vijaya Bank, Sanky Road Branch, Bangalore).



The Complainants (wife and husband), had made two Fixed Deposits under ‘Vijaya Cash Certificates’ bearing VCC. Nos. 308/91 and VCC. No. 309/91 dated 31.10.1991. The face value of the deposits were Rs.2, 00,000/- each and its maturity value were Rs.2,53,360/- each. The date of maturity was 31.10.1993. 

The Complainants had availed loan of Rs.15,000/- against fixed deposit No. VCC.308/91.

The complainants had committed to purchase a residential site in Gangenahalli from Sri N. Rajashekaraiah for a consideration of Rs.3,90,000/-. The complainants paid an advance of Rs.50,000/- and the balance amount was agreed to be paid on or before 24.1.1992. Therefore, to meet this commitment the Complainants sought withdrawal of the deposits before maturity. Vijaya Bank declined to permit the withdrawal and so the complainants sought the loan of 75% of the deposit value. This was declined as well.

Further, it was the case of the complainants that complainant No.2 (H.K. Somasekhar) and his father Kalaiah, were partners of a Firm by name ‘Quality Castings’, had borrowed certain sums from the Opp. party-Bank, Peenya Industrial Estate Branch and as on that date the outstanding liabilities of the loan account was Rs.5,00,000/-. Complainant No.2 and his father had provided a security of a house property for the loan. The house property was valued around Rs.50,00,000/-.

The Opp. party refused to permit withdrawal of the deposit amount before maturity and also refused to advance any loan on the deposits on the ground that complainant No.2 and his father were in due of Rs.5,00,000/- in respect of their firm ‘Quality Castings’ in Peenya Bank Branch of the Opp. party.


The complainants averred that the Opp. party had no right to exercise general lien on any portion of the fixed deposit (Nos. VCC. 308/91 and VCC. 309/91) in respect of the liability of the firm ‘Quality Castings’.

The Opp. Party averred that the firm ‘Quality Castings’ was in due of Rs.5,00,000/- to its Peenya Branch and so it was entitled to exercise general lien over the above mentioned deposits. Hence, it did not make payment relating to the said deposits either for premature withdrawal or advancing loan to the complainants. Thus, the Opp. party sought for the complaint to be dismissed.

On 15.9.1994, the learned Counsel for the Opp. party filed a memo under: Memo it was stated that as per the terms of the compromise entered between Mr. Somashekhar (complainant No.2) and his father Mr. Kalaiah, the partners of the partnership firm, Mr. Kaliah, would taken over the business along with entire liability and had assured to clear the loan taken from Vijaya Bank, Peenya Branch within 3 days. In light of this development the Opp. party decided that they would not exercise banker’s lien.


It was observed that the Opp.party declined withdrawal and advancing loan in exercise of Bank’s general lien of 50% of the amount payable, this being the share of the deposit of Complainant No.2.

It was observed that the complaint was filed before the date of maturity i.e., on 3.2.1992, the date of maturity was 31.10.1993. Yet, the Opp. Party had not made payment of the said amount of fixed deposit to the complainants even after the date of maturity.

It was held that, withholding of payment of the deposit amount to the complainants even after the date of maturity and assurance of the Opp. party that it would not exercise banker’s lien on 15.9.1994, were clearly deficiency in service. 

In was held that the award of interest on the maturity value of the deposits would serve the ends of justice.

Thus, the Opp. party was directed to pay interest on the said maturity value of the fixed deposits, minus a sum of Rs.15,000/- with interest due (the loan availed by the complainants), at 15% per annum from 31.10.1993 till the date of its payment to the complainants.

The Opp. party was also required to pay a sum of Rs.2,500/- towards costs in this complaint. The Opp. party was required to pay the sums so awarded within a period of 30 days (case decided on 29/10/1994).

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